For many owners, there comes a time when your commercial real estate space or lease is just not working. Instead of waiting for the lease to expire, you can renegotiate now.

Renegotiating a lease is often overlooked by companies who don’t know they have the ability, and in some cases leverage, their commercial real estate lease to better meet their current needs. However, we do caution that you need someone experienced to guide you through the process.

Why Renegotiate My Lease?

Some of the most common reasons to renegotiate your lease include:

• You don’t need as much space. Whether your employees continue to work remotely or adopt a hybrid

• Space is dated or tired looking.

• Your business is growing, and you need more space (great news for you!)

• You lost a large account and need some financial relief until that income can be replaced.

• Your landlord is inattentive.

“Generally, it is good to renegotiate when the market conditions have changed,” said Nick Weis, Managing Broker of Suburban Real Estate Services. “For example, if you signed a lease when rental rates were dramatically above today’s market, you might want to see if you can renegotiate terms to better reflect current rates.”

Is There a Right Time to Renegotiate?

While there is no “right” time to renegotiate your commercial real estate lease, there are some considerations you can use to guide your decision of when to start the process.

The first is when you feel the need. Why wait and make do with too much, too little, or the wrong space? As soon as you feel the need for change, start the discussion.

Second, look at the timing of your current lease. If there is less than a year left, lease renewal conversations with the landlord will be normal during this time frame anyway. However, if you have more than 12 months left on the lease, the discussion becomes a renegotiation.

What Leverage Do I Have?

Landlords have pain points and challenges similar to tenants. With our experience, we can help you identify and leverage those for more favorable terms in a renegotiation.

For example, keeping an existing tenant is more valuable and often less expensive than finding a new tenant. Landlords would rather renegotiate and have some cashflow than experience any “downtime.”

Also, landlords may be dealing with their lender to renew or refinance their mortgage. High vacancy rates are a red flag and lenders don’t look favorably on space that sits empty for a long time.

What is the Most Important Success Factor?

We can’t stress enough that when it comes to renegotiating your commercial real estate lease, you need an expert.

We have decades of experience (re)negotiating leases, with access to real-time market data and insight that helps us represent your best interests.

This uniquely allows us to help guide you through the process, including identifying:

• reasonable changes to your lease;

• architectural and design considerations;

• financial modeling to project true occupancy costs over the lease term; and

• landlord pain points.

With an outside perspective, we also help to keep emotion out of the negotiation.

“As your trusted partner and advisor, we are there for you and can help influence the entire process,” shared Bryan Barus, President and Designated Managing Broker. “It’s more than just information, it’s understanding. That’s the value we provide.”

For an expert to guide you through the process to a successful outcome, call us at.

Since 1991, Suburban Real Estate Services has been helping clients lease, buy, sell, and manage commercial real estate. Let’s find out how we can help you.